Riley proposes compromise on tax cuts

Monday

May 5, 2008 at 12:01 AM

By Dana BeyerleTimes Montgomery Bureau

MONTGOMERY — Gov. Bob Riley has asked legislative leaders to compromise on tax cuts that he said won’t cost state budgets like some current proposals.Riley’s proposal released late in the legislative session would cut the state’s 4 percent sales tax on food by 75 percent, to 1 percent, saving taxpayers $270 million.Riley’s proposal he said he’s shown to Senate and House leaders also would implement a 200 percent income tax deduction for health insurance premiums for small businesses and allow voters to determine whether to return to four-year property appraisals.“I think we got a good proposal,” Riley said last week. “Everyone wants to take the state tax off food (and my proposal) still allows 98 percent of the people to have part of their federal income tax deduction.“It makes far more sense to do this than shifting the (tax) burden to 35 percent of the population,” Riley said.A stalled legislative proposal would eliminate the state 4 percent sales tax on food, saving taxpayers about $320 million, but it would also raise state income taxes by removing the federal income tax deduction.Supporters of the legislative proposal say other tax changes would mitigate the impact of the loss of the federal income tax deduction and could result in overall tax cuts for some.House General Fund committee chairman John Knight, D-Montgomery, said only 20 percent of Alabamians would see tax increases under his sales tax and federal income tax deduction constitutional amendment that lost a test vote in the Senate last week.Sen. Roger Bedford, D-Russellville, said he hasn’t been briefed but except for the four-year appraisal schedule, “it sounds like a move in the right direction.”Riley changed property appraisals from every four years to every year because, he said, it’s what the law requires.But Bedford said Riley can return to four-year appraisals without a vote.Both Democrats and Republicans vowed to reverse annual property appraisals in this legislative session but powerful special interests so far have killed any initiative.The legislative session that must end by May 19 has three working days remaining. “We’ll push it in the remainder of the session,” Riley said of his offer.

Online Services

Original content available for non-commercial use under a Creative Commons license, except where noted.
Gadsden Times ~ 401 Locust St. Gadsden, AL 35901, Gadsden, AL 35901 ~ Privacy Policy ~ Terms Of Service